Journal of Financial Planning: September 2017
Nick Nicolette on FPA’s Member Advocacy Council, Volunteerism, and Advancing the Profession
WHO: Nick Nicolette, CFP®
WHAT: Chair of FPA’s Member Advocacy Council, former
FPA president, a founder and principal of Sterling Financial Group.
WHAT'S ON HIS MIND: “The public must come to the point of recognizing financial planning as a profession through planners’ actions.”
For Nick Nicolette, giving back to his profession is not just something that he finds time to do on weekends or evenings; it’s an integral part of the financial planning professional—and the person—he is today.
After serving in several volunteer leadership roles locally and nationally for FPA, including president of FPA in 2007, Nicolette was asked by the FPA Board of Directors to head up the new FPA Member Advocacy Council, or MAC. The MAC provides a mechanism to evaluate and influence—through ongoing analysis and feedback—the activities of regulatory and certifying bodies that impact FPA members and all CFP® professionals.
The Journal recently sat down with Nicolette to learn more about the MAC, FPA’s role in advancing the profession, and how his volunteer leadership has impacted him personally and professionally.
1. What do you believe is FPA’s current role in protecting CFP® professionals?
I think it’s about providing a place for all CFP® professionals to share their thoughts and insights. It’s really about moving us toward what has been written about and talked about over many years—creating a recognized profession that serves the public.
I look at FPA as creating the space to have voices heard, and I think that’s our greatest strength—that collective voice. I think it’s three-pronged: create a recognized profession, help members increase success in their own practices, and help expand their ability to serve their clients and extend that further out into the public.
2. How have you personally seen FPA’s role evolve over the years as an influential voice for advancing the financial planning profession?
It’s been a wonderful and long journey. I have been a member of the association for 35 years and have served in various leadership capacities over the last 20 years. To have seen what came from understanding what financial planning could be to then, after the merger [of FPA’s predecessor organizations, the ICFP and IAFP in 2000], watching FPA become the voice of the profession. FPA has continued to make great strides, but it then started to have a laser-like focus on expanding the conversation of the responsibility of the financial planning community to serve clients’ best interests at every level.
That common theme continued to build throughout FPA, and the voices have become, I think, stronger and stronger over the years, leading to FPA members and aligned groups providing testimony directly in Washington.
I personally had that great honor in 2007 when I testified before the Senate Committee on Aging, where I was asked, if I could wave the wand, so to speak, what would I do to make things better for the public? My answer was: if we had a profession that served everyone’s best interests as a fiduciary regardless of compensation, the public would be much better served. And that focus on fiduciary has continued with the creation of the Financial Planning Coalition, which brought together three very strong voices—CFP Board, NAPFA, and FPA—to build a unified voice.
As a close friend of mine who led an Army Ranger battalion said: do the right thing, and then do the next right thing. And I think that really sums up FPA. Our strength has been our consistency in the ebbs and flows of the profession, the regulatory environment, and economic cycles to always come back to the main goal of supporting FPA members and moving the profession forward.
3. You have a long history of local and national volunteer leadership in FPA, and you currently serve as chair of the FPA Member Advocacy Council (MAC). How have your volunteer roles helped you professionally?
I am overwhelmed sometimes when I think about both the personal and professional impact that my volunteer service in FPA has had. The core of that is the ability to work and interact with so many amazing people with different viewpoints. But I think even more important, it helped expand my views and appreciation on virtually everything—on a personal level, of what is important to the individual and how to view their point of view as critically important in order to learn, understand, and continue to evolve as a human being. I am probably 10 times the professional I might have been if I had not volunteered.
4. The FPA Member Advocacy Council (MAC) was formed last year. What is the MAC, and what role does it play in supporting FPA members?
The FPA Board of Directors recognized that one of the most important roles of FPA is to give members a voice on the issues that impact them, specifically on the regulatory and certifying bodies, such as CFP Board, that have a great impact on them and the collective profession.
The board asked me if I would chair [the Member Advocacy Council] to bring together a group of members and participants in different parts of our profession, representing different types of compensation methods, firm levels, and business models. The MAC’s goal is to seek the input of our members on issues and create a space to allow messages to go back and forth between members. Ultimately, the MAC reports back to the FPA board with recommendations to help both the profession and our members.
We started with focus groups in January, and members immediately started talking about streamlining the regulatory issues between FINRA, the SEC, state securities administrators, and state insurance departments, and how FPA could help build a more harmonized environment to serve our clients. It’s a building process of how to hold, where to hold, and how to create those outreach opportunities.
5. On June 20, CFP Board came out with proposed changes to the Standards of Professional Conduct that govern CFP® professionals. Can you bring us up to speed on that?
The last time CFP Board updated the Standards of Professional Conduct that govern CFP® professionals was 10 years ago. It was at that time that CFP Board revised the standards to require CFP® professionals to act in a fiduciary capacity throughout the financial planning engagement with clients. This was a big step forward at the time, but things have changed since then and the standards needed to be updated.
CFP Board convened a Commission on Standards more than a year ago to review the standards and propose changes (which were made public on June 20) that updated the standards to account for the vast changes we’ve seen in the financial services industry and the financial planning profession. Among the proposed changes is the expansion of the fiduciary requirement to all financial advice, a revised definition of “financial planning,” and a new definition of “financial advice,” among other changes.
CFP Board opened a comment period for 60 days, which [will have] concluded on August 21. Since then, the MAC has been working diligently to collect member input on the proposed standards to help us form an official FPA position that is representative of our members’ views. CFP Board was very gracious to meet directly with members of the MAC to give us insights on what they were doing to help us expand our outreach to FPA’s CFP® member community.
6. How did the MAC engage FPA’s CFP® professional members to ensure their voices were heard on CFP Board’s proposed changes?
We engaged with FPA members through a variety of feedback opportunities, including various member communications and a survey. We also hosted a webinar, and we followed that up with additional outreach. We’ll continue to reach out to our members to gain more insights on how they feel and what particular issues they need addressed. The MAC is working to make sure that the voice of CFP® professionals is heard and that their questions and concerns are considered as CFP Board works to finalize the standards.
We have been encouraging members to send in their thoughts on the proposed standards to the confidential MAC email address. It’s a safe place for our members to share what they are thinking. It’s very important for members to understand that if they have a private thought, concern, or insight, they can send it to that email, and their identity is not going to be put forward and publicly shared.
7. What is the potential impact of CFP Board’s proposed changes to FPA members and the profession?
I believe this has a significant potential to move us toward being a more recognized profession. I think most of us live and work as professionals, but I also believe the majority of CFP® professionals are committed to elevating financial planning and the CFP® designation and advancing toward a fully recognized profession in the eyes of the public.
There have been so many seminal pieces of work over the years, but I recently reread “To Act…Like a CFP” by Jeanne Robinson and Charlie Hughes (originally published in the April 2009 Journal) that gets into the difference between living as a professional and being recognized as a profession.
One of the critical parts of that article is that the public must come to the point of recognizing financial planning as a profession through planners’ actions. In essence, the profession can’t self-proclaim itself as a profession. You not only have to live it, but you have to have things in place where the public can look and clearly see and recognize it as a profession.
8. When CFP Board finalizes the changes to the Standards of Professional Conduct, how will FPA and the MAC support members in adhering to the new standards?
It’s very clear so far hearing from our members, that a significant need is resources and programs that can help CFP® professionals adhere to the new standards once finalized. There are many needs that are within the current proposal, but future resources could include guidance on: How do I document? How do I serve in a fiduciary capacity as outlined by CFP Board?
FPA’s CFP® professional members are asking us to make sure that FPA lets CFP Board know the resources and tools that they need from CFP Board and what tools they need from FPA to move forward. We have collected so many great thoughts from our members already that will help the MAC formulate a game plan for the association to support CFP® professionals in adhering to the new standards.
9. How do FPA members connect with the MAC?
Through a few different ways. It might be through a webinar or it might include taking a survey to share your thoughts. When you see a survey come from the MAC, that survey is all about wanting to know how you feel and what’s important to you in your work as a financial planning practitioner. Participating may be the best 15 or 20 minutes you can spend in an entire year to serve yourself and your profession. Have your voice heard whether that means attending a MAC webinar, responding to a MAC survey, or sending a quick email. If it’s a thought, send it. It’s important.
10. What other issues will the MAC tackle as we wrap up 2017 and look toward 2018?
We will continue to address the ways in which FPA can support CFP® professional members in adhering to the Standards of Professional Conduct once they are finalized. Since these changes to the standards will have such a profound impact on our members and the profession of financial planning, that will be our immediate focus.
We will then pick up where we left off from the beginning of the year when we sent out a survey to our members about concerns they have with regard to regulatory bodies like FINRA and the SEC. That survey provided us some direction on what the MAC needs to explore deeper this fall in collaboration with FPA members. Through that work we will be able to outline how we can best advocate for our members with those important agencies. Much more to come!
Carly Schulaka is editor of the Journal. Contact her HERE.